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"There will be growth in the spring," according to Chauncey Gardiner. "As long as the roots are not severed, all is well."

"Chauncey" is actually Chance the Gardener, the simple-minded innocent in the 1970s cult classic film Being There, who, in a bizarre instance of mistaken identity, is thought to be a great business mogul. As such, his clueless statements about horticulture are taken to be profound insights, especially about the economy, by the even-more-clueless rich and the elite, including the president. We're in on the joke, that Chance actually knows nothing, but what he sees on television or observes within the confines of the garden of the cloistered house where he spent his entire life.

More than three decades later, economists have been unanimous in predicting for several years that there will be growth in the spring. But instead of broad satire, their forecasts have been made in dead seriousness. And each time, the growth proves to be ephemeral, withering, and dying instead of blossoming as the weather turns warm.

The spring of 2013 appears to be following the script from 2012, and 2011, and 2010. Do you sense a pattern here? Keen-eyed Stephanie Pomboy, who runs the MacroMavens advisory, does, and it seems to be recurring right on schedule. "Everything from purchasing-manager surveys (both regional and national) to retail sales and employment to durable goods and consumer sentiment has taken a sudden and significant turn for the worse," she writes. And, just in case it's déjà vu all over again, she reminds her subscribers that stocks slid 10% in eight weeks last year.

The problem isn't so much the decidedly uninspiring preliminary report on first-quarter gross domestic product released Friday, which showed inflation-adjusted annual growth of 2.5%, short of 3% predictions. It's that the economy has trailed the equity market substantially. The Standard & Poor's 500 is up some 16% from its November low, while the breadth of economic indicators (specifically Citigroup's U.S. Economic Surprise Index, which tracks better-than-expected indicators versus downside surprises) peaked well short of the highs seen in the spring in 2012, 2011, and 2010. And it is rolling over yet again.

But recent housing indicators contrast with the stocks' performance. "Existing home sales and single-family starts both disappointed, while new-home sales rose a modest 1.5% on the back of a 6.8% decline in price," Pomboy writes in her latest note to clients. "At the same time, mortgage applications for home purchase, the best window into noninvestment buying activity, continue to hover just above their crisis lows. While the going story is that the problem is insufficient inventory, the folks in the business of creating said stock aren't quite so sanguine. The NAHB Index of home-builder sentiment has declined three months in a row, a fact which would be troubling enough were these not three months that seasonally tend to see sentiment rise" (her emphasis).

Residential construction was a bright spot in the GDP report, growing at a 12.6% seasonally adjusted annual rate in the first quarter, but more slowly than the heady 17.6% pace in the fourth quarter of 2012. And while the overall GDP growth rate of 2.5% was well ahead of the near-stall speed of 0.4% in the fourth quarter, real final sales -- which strip out inventory changes -- showed a continued deceleration, to a 1.5% annual rate, from 1.9% in the fourth quarter and 2.4% in the third.

Consumption -- about 70% of the economy -- did perk up in the first quarter, expanding at a 3.2% annual rate, versus 1.8% in the preceding quarter, but much of that represented services, especially spending for utilities during the winter. For whatever reason, consumers had to cut back on savings with the end of the 2% payroll-tax holiday and the rise in marginal tax rates on top earners.

To be sure, government continues to be a drag, contracting at a 4.1% annual rate after the 7% annualized plunge in the preceding quarter. But that reflects little of the effects of the sequestration cuts, which were just announced March 1. In other words, there is likely more fiscal drag ahead, although it's comforting that Congress found a way to reduce the furloughs of air-traffic controllers, which caused widespread delays last week. It had nothing to do with their frequent flights back home each week, of course.

THE ANNUAL SPRING SWOON has quieted talk of the Federal Reserve beginning to "taper" its $85 billion-a-month purchases of Treasury and agency mortgage-backed securities. The less-punk economic reports earlier in the year led to chatter that the Fed could begin to slow its purchases, or perhaps adjust their pace according to the ever-shifting outlook. But that's less likely when the Federal Open Market Committee gathers Tuesday and Wednesday against the backdrop of less-robust indicators than when it met in March.

So you can count on the policy-setting panel rubber-stamping the decision of the previous confab. The $1 trillion annual rate of bond buying is likely to extend into 2014 -- even if unemployment falls toward the central bank's 6.5% goal. The FOMC isn't fooled by a lower jobless rate caused by folks' dropping out of the labor force. The diminished likelihood of cuts in Fed purchases as economic reports have turned tepid also is evident in the decline in the benchmark 10-year Treasury yield, to 1.66%, the lowest level since early December, from just over 2% in early March.

The one new facet is the growing likelihood that Ben Bernanke is performing his swan song as Fed chairman. By saying he was skipping the annual gathering at Jackson Hole, Wyo., in late August -- the Woodstock for monetary-policy makers and academics, where he has been the featured speaker and where he has made major policy pronouncements -- Bernanke leaves the stage open for other stars.

That would include Fed Vice Chairman Janet Yellen, anointed as the most likely to succeed him on page one of Thursday's New York Times. If anything, Yellen would be more likely to maintain monetary stimulus.

Nor should April's employment data, due Friday, change the policy outlook. A return to the recent trend of nonfarm-payroll gains of 150,000 is the consensus call after March's weak 88,000 increase, while the unemployment rate is forecast to remain at 7.6%.

But the continuation of the Fed's QE -- quantitative easing -- apparently is mainly helping the capital markets. Corporations and governments are issuing bonds at record-low interest rates because of the unrelenting demand from investors for income-producing securities. So
AppleAAPL -1.5351744876157316%Apple Inc.U.S.: NasdaqUSD124.43
-1.94-1.5351744876157316%
/Date(1427835600323-0500)/
Volume (Delayed 15m)
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40410221AFTER HOURSUSD124.489
0.05899999999999750.04741621795386965%
Volume (Delayed 15m)
:
1460147
P/E Ratio
16.657295850066934Market Cap
736073426681.742
Dividend Yield
1.5108896568351684% Rev. per Employee
2153110More quote details and news »AAPLinYour ValueYour ChangeShort position
(AAPL) may issue some $40 billion in debt securities to help fund its return of cash to shareholders via dividends and share repurchases, as Tiernan Ray reported in Barrons.com's Tech Trader Daily blog last week. Most of Apple's cash is overseas, so it's more tax-efficient to borrow at record-low yields than to repatriate the assets. At the other end of the credit spectrum, Rwanda was able to issue $400 million of dollar bonds to refinance external debts at under 7%, such is the thirst for yield, with corporate junk bonds averaging under 5.5%.

Indeed, the financial markets have been the main beneficiaries of central banks' pushing interest rates near absolute zero (and less when inflation is counted). "QE is good for the stock market, but bad for investment," writes David P. Goldman, the former head of bond research for Bank of America, in his latest MacroStrategist missive. "Cheap leverage makes it safer to buy existing assets than to build new plant and equipment," which is reflected in the weak March durable goods report out last week.

Even so, central banks around the globe are buying assets, including equities, reports Bloomberg News, citing data from Central Banking Publications and the Royal Bank of Scotland. As part of its aim of doubling the size of its monetary base, the Bank of Japan will double its holdings of exchange-traded funds, to ¥3.5 trillion ($35.2 billion). The report added that the central banks of Israel, Switzerland, and the Czech Republic also are lifting their stock holdings.

According to a report released last week by the Pew Research Center, the wealthiest 7% of Americans -- the group most likely to own stocks -- saw their net worth rise 28% in 2009-2011, while the lower 93% experienced a 4% decline. "These wide variances were driven by the fact that the stock and bond markets rallied during the 2009 to 2011 period, while the housing market remained flat," Pew stated. And the main driver of that rally has been the Fed's asset purchases to drive down interest rates, which looks as if they will continue. QE-4ever!